Baltic Railways Show Promise

Central European and Baltic railways are exploiting western demand for raw materials. Soviet-era computer-based vehicle location systems and intermodal are helping them along

From 1994 to 96, transit rail traffic through Latvian ports increased by 34 %, and on the north-south axis, by 42 %. This increase is not only attributable to our geographical location, but also to the fact that we produce efficient transport, says Máris Bremze at the Latvian Railway to the Swedish Transport-Journalen.

Shipped west are petroleum products, artificial fertilizer and chemicals. At the Latvian-Russian border, seven times as many tonnes are shipped west than east in the first quarter of 1996, according to a study by consulting firm KPMG and two other firms. The already profitable freight division of the Latvian railway wants to encourage transport in the other direction by expanding the container terminal in the year-round ice-free harbour in Ventspils. Western consumer goods companies are starting to market western consumer goods on a large scale, not only the often cited cars and shoes but also beer and furniture, for example.

Railways take half of the tonne-kilometers produced in Latvia and the railway is lobbying hard to find money to modernize the network now, in order to be competitive when demand starts going upscale towards regular just-in-time type deliveries. As things stand, the passenger services in Latvia gobble up all the income made in the freight sector; KPMG's study recommended letting the freight division keep its profits and let someone else finance the passenger services.

The railways were one of the few industries in the former Soviet Union that actually worked, Transport-Journalen writes. The USSR may have been a police state, but at least it policed its railways well. For over a decade, a computerized system has kept track of every train and every car on the 150 000 kilometre Soviet railway network. There is no problem with passing borders within the former Soviet Union, as the system was built as an entity. European-style delays at the border don't occur here.

Moreover, as the Soviet system was built around the railway, there is already a functioning intermodal system; many companies naturally have tracks straight into their factory, where cars may be hauled virtually non-stop across the continent. If western companies are ready to pay the workers at the railway, an efficient and large-scale transport machine is theirs.

Source: Transport-Journalen

Further Reading: The Economist's Survey of Business in Eastern Europe: Eastern Europe Recasts Itself, dated November 22nd. Also see the official website of the Estonian Railways.